May 28, 2021

The Weekly Gist: The Bugs Gone Wild Edition

by Chas Roades and Lisa Bielamowicz MD

Mother Nature’s latest metaphor is anything but subtle. Just as we’re emerging from a year in our basements and stumbling back into some semblance of normal life, hundreds of billions of periodical cicadas have begun to dig out from 17 years of underground slumber, and are blindly and noisily pursuing their singular life goal: getting it on. The rest of you will have to forgive those of us living in the mid-Atlantic states and central Ohio: all we can talk about now is this absolutely Biblical plague of ruby-eyed, sex-starved, 80-decibel-screeching insects. They’re everywhere, crawling up every surface, making outdoor walks an exercise in duck-and-cover, and littering the ground with their crunchy husks. It’s gross. But also, extremely cool. There’s something downright charming about a bunch of ugly, awkward 17-year-olds crawling all over each other, looking for love. Beach week, but for bugs. Welcome back cicadas—you’re not going to believe what you slept through.

THIS WEEK IN HEALTHCARE

What happened in healthcare this week—and what we think about it.

Few healthcare surprises in Biden’s enormous FY22 budget

President Biden released his budget proposal for fiscal year 2022 on Friday, clocking in at a whopping $6T of federal spending on programs aimed at making sweeping investments in infrastructure, education, and social services, and banking on hefty government borrowing at low interest rates to fuel a major overhaul of the American economy. The proposal includes big increases in discretionary spending, including raising funding for the Department of Health and Human Services (HHS) by 23.4 percent, to $133.7B, the largest increase in almost two decades. The budget bolsters funding for a variety of healthcare programs, but notably includes specifics on only two major increases in mandatory healthcare spending: making permanent the temporary subsidy increases for individual coverage that are part of the American Rescue Plan Act ($163B); and expanding home- and community-based services in Medicaid ($400B). Both of those proposals were announced earlier this year as part of Biden’s twin recovery packages for infrastructure and social programs.

Notably absent, apart from statements of general support, are any details for implementing a “public option” health plan, or for lowering the Medicare eligibility age to 60—two healthcare proposals that figured prominently in Biden’s campaign platform. Nor are there specifics on lowering spending on prescription drugs, another key area of interest among lawmakers. Like all presidential budgets, the Biden document is simply a statement of priorities, providing a starting point for negotiations in Congress. But the relatively narrow scope of the healthcare proposals—as hefty as their price tags are—indicates that the White House is likely not willing to throw down over a major overhaul of coverage, at least while Congress is so closely divided. While there are bills afloat in both the House and Senate to more aggressively expand coverage, we’d expect this summer’s legislative horse-trading to result in something resembling what’s in the President’s budget—and not much more. “Medicare at 60” and a national public option are likely on hold, at least until after the 2022 midterm elections.

Deepening the role of Big Tech in analyzing clinical data

HCA Healthcare, the nation’s largest for-profit hospital chain, which operates 185 hospitals and more than 2,000 care sites across 20 states, announced a landmark deal with search giant Google this week, aimed at extracting and analyzing data from more than 32M annual patient encounters. The multiyear partnership will involve data scientists from both companies working together to develop care algorithms and clinical alerts to improve outcomes and efficiency. Data from HCA’s electronic health records will be integrated with Google’s cloud computing service, and the companies have pledged to adhere to strict limitations to protect individual patient privacy—a key concern raised by regulators after Google announced a similar partnership with another national health system, Ascension, at the end of 2019. Despite those assurances, some experts pointed to this week’s announcement as further evidence that existing privacy protections are insufficient in the face of the deepening relationships between tech companies, like Google and Microsoft, and healthcare providers, who manage the sensitive health information of millions of patients.

We’d agree—we’re overdue for a major rethink of how patient privacy is handled. The healthcare industry spent much of the last decade “wiring” the health system, converting from paper records to electronic ones, and building vast storehouses of clinical data along the way. We’ve now reached a new phase, and the primary task ahead is to harness all of that data to actually improve care. That will require extensive data sharing, such as a recently announced initiative among several major health systems, and will also entail tapping the expertise of “big data” companies from beyond healthcare—the very same companies whose business practices have sometimes raised privacy concerns in the broader social context. But health information is different—more personal and more sensitive—than data about shopping preferences and viewing habits, requiring more rigorous regulation. As more big data deals are inked in healthcare, the question of patient privacy will become increasingly pressing.

Telemedicine provider Babylon Health buys 700-doctor group

Last week it was reported that London, UK-based telehealth provider Babylon Health has acquired Meritage Medical Network, a 700-physician practice based in northern California, along with that group’s managed care contracts, laboratory, ancillary and urgent care assets. Added to the company’s acquisition of a large Fresno-based physician group late last year, Babylon now employs nearly 2,000 doctors in California. Babylon’s CEO, Dr. Ali Parsa, a healthcare entrepreneur and “app-maker”, notes that “in less than a year, Babylon has gone from being unknown in the US to today managing the total cost of care for up to 90,000 lives.” Babylon has grown quickly across the UK and Canada, but not without controversy. A contract with Britain’s National Health Service (NHS) to provide triage and diagnosis services gave Babylon its first big break, although some doctors questioned the accuracy of its “chatbot” diagnostic engine, alleging that 10 to 15 percent of its recommendations were “flat out wrong”. As Babylon now expands in the US, it will bear watching to see how the company’s AI-driven technology platform will integrate into patient access, care management and risk contracting. How doctors will figure into Babylon’s business model is also an open question: will the company be a long-term operator of physician practices, or ultimately look to doctors to support further expansion of its virtual care services? Regardless, Babylon’s medical group deals represent the emergence of a new class of competitor for physician talent—expect other technology companies to join payers, retailers, and private equity investors on the list of well-funded organizations looking to pay top dollar in the race to acquire and roll up physician practices.


GRAPHIC OF THE WEEK

A key insight or teaching point from our work with clients, illustrated in infographic form.

ED volume remains persistently down, but at higher acuity

As we shared recently, post-pandemic healthcare volume is not returning evenly. While outpatient volume is rebounding quickly, other settings remain sluggish, especially the emergency department. We partnered with healthcare data analytics company Stratasan to take a closer look at ED volume decline. As shown in the graphic below, nationally, ED visits were down 27 percent in 2020, compared to 2019. ED-only volume (cases that started and ended in the ED) took a large hit across last year, down nearly a third from 2019. We expect that a portion of this ED-only volume will never fully recover to pre-COVID levels, with patient demand permanently shifting to lower-acuity care settings, including virtual, and some patients avoiding care altogether for minor ailments as they learn to “live with” problems like back pain.

ED-to-observation volume saw the greatest decline in 2020, likely as a result both of patients avoiding the ED, and presenting in the ED sicker, meeting the criteria for inpatient admission. However, ED-to-inpatient volume, which fell only seven percent in 2020, has been returning. In the second half of 2020, the ED-to-inpatient admission rate was 20 to 30 percent higher than the pre-COVID baseline. Across all three categories of ED volume, pediatrics saw steeper declines compared to adult cases. While some further ED volume rebound is anticipated, health systems should expect that fewer, but sicker, patients will be the new normal for hospital emergency departments. Fewer low-acuity patients utilizing high-cost emergency care is good news from a public health perspective, but health systems must bolster other access channels like urgent care and telemedicine to ensure patients have convenient access for emergent care needs.


THIS WEEK AT GIST—ON THE ROAD

What we learned this week from our work in the real world.

Could physician “income inequality” hold back the medical group?

We spoke this week with a medical group president looking to deploy a more consistent consumer experience across his health system’s physician practices, beginning with primary care. The discussion quickly turned to two large primary care practices, acquired several years ago, whose doctors are extremely resistant to change. “These guys have built a fee-for-service model that has been extremely lucrative,” the executive shared. “It was a battle getting them on centralized scheduling a few years ago, and now they’re pushing back against telemedicine.” With ancillary income included, many of these “entrepreneurial” primary care doctors are making over $700K annually, while the rest of the system’s full-time primary care physicians average around $250K. The situation raises several questions. Standardized access and consistent experience are foundational to consumer strategy; in the words of one CEO, if our system’s name is on the door, any of our care sites should feel like they are part of the same system, from the patient’s perspective. But how can we get physicians on board with “systemization” if they think it puts their income at risk? Should the system guarantee income to “keep them whole”, and for how long? And is it possible to create consensus across a group of doctors with a three-fold disparity in incomeand widely divergent interests? While there are no easy answers, putting patients and consumers first must be the guiding goal of the system.

The never-ending search for service line structures that work

A recent conversation with a health system executive again reminded us of the complexity of managing a clinical enterprise. The topic: service line management, a perennial issue which, despite years and years of experimentation with different models, still vexes most health systems. We’ve seen service line approaches come and go, with myriad permutations of incentive plans, dotted-line reporting structures, and “dyad” physician-administrator leadership models. As systems grow, encompassing multiple markets and facing increasing competition for profitable services, the search for the “right” way to organize service lines persists. At the root of the problem: translating the faculty and organ-system oriented model of medical organization into business units that can respond to the changing demands of the market. To put it another way: individuals and third-party purchasers aren’t interested in buying “neurosciences” or “orthopedics” or “oncology”—they need specific clinical solutions: back pain management, hip replacement, breast cancer treatment, and so forth. But most traditional systems aren’t organized that way, and business units built around clinical solutions are unwieldy when overlayed on old-school facility and faculty-oriented structures. It’s not a problem unique to healthcare: many industries have struggled with implementing matrices that tie together functional and product units into market-responsive “solutions” businesses. What’s clear today: given accelerating disruption and more “activated” purchasers of care, the search for service line structures that allow systems to respond to market demand in a flexible and agile way has become more urgent than ever. We’ll continue to work with our members to develop those solutions and will report back on where we’re seeing success—please let us know what you’re seeing on this front!


THIS WEEK AT GIST—ON THE PODCAST

All the headlines in healthcare policy, business, and more, in ten minutes or less every weekday morning.

In celebration of the Memorial Day holiday, there will be no Gist Healthcare Daily episode on Monday. But on Tuesday, Alex will return with a mini-series on COVID vaccine mandates. We’ll hear from Dr. Marc Boom, CEO of Houston Methodist, which was the first health system in the nation to require its workforce to receive the COVID vaccine. Boom says the requirement was intended to get to the “last mile” of full vaccination, and now more than 98 percent of the system’s staff are immunized.

On Wednesday we’ll hear from Dr. Bryan Kibbe, clinical ethicist at Marietta, GA-based Wellstar Health System, about the factors systems are weighing as they decide whether to make the COVID vaccine mandatory for employees.

[Subscribe on Apple, Spotify, Google, or wherever fine podcasts are available.]


ON THE GIST TURNTABLE

Give this a spin—you might like it.

Recently, the All-Seeing, All-Knowing Algorithm spit out a listening suggestion that seemed plucked from the deep recesses of an early-80s memory hole: “Check out Intruder, the new album from Gary Numan.” Yep, the “Cars” guy, that largely forgotten pioneer of dark electropop, the Bizzarro-World David Bowie. The androgynous machine-head whose early work prompted the Thin White Duke to jealously call him out on a 1980 diss track as “a broken-nosed mogul…one of the new wave boys…pretending it’s a whiz-kid world”. Turns out Numan has kept at it all these years, gradually watching his techno-dystopic predictions come true, and evolving his musical palette from “stripped-down Depeche Mode” to “even-darker Nine Inch Nails.” Now 45 years into his journeyman career, his preoccupation has turned to climate change, and his latest is a concept album, written from the perspective of a dying Earth. Full of soaring synth choruses, bombastic beats, and Numan’s trademark warble (he still has the vocal chops), the tracks are a stark lament for the uncaring destruction humanity has wrought on the planet. But also, very danceable! Numan has spent the decades honing a goth-disco style that continues to be his trademark, which sounds as futuristic today as it did during the dawn of electronica. A welcome drive down memory lane—but don’t forget to lock all the doors…it’s the only way to live. Best tracks: “Intruder”; “Saints and Liars”; “The End of Dragons”.


WHAT WE’RE READING

Stuff we read this week that made us think.

Who the heck is Dr. B, anyway?

Back in February, when COVID vaccines were scarce, we both eagerly signed up for Dr. B, a website launched by one of the co-founders of online scheduling service Zocdoc, that promised to match individuals with leftover vaccine doses for free. Neither of us heard a peep from Dr. B about available appointments until mid-April, well after we’d gotten our first doses, once shots had become widely available. Turns out, that was the experience of the vast majority of the site’s users. The author of a recent piece in MIT Technology Review, after weeks of research, couldn’t find a single individual who had received their COVID shot through Dr. B. And while the company purports to have nearly 2.5M subscribers, it won’t disclose how many vaccines it helped deliver. Moreover, Dr. B’s leadership wouldn’t say what they planned to do with the health and personal information gathered from millions of enrollees desperate to get a shot, instead providing vague assurances that while the company isn’t subject to HIPAA privacy regulations, they hold to strict “internal” privacy standards—and claiming that questions about their ultimate business model are part of a “bizarre attempt” to hamper the company’s vaccination efforts. According to one interviewed expert, the basic information collected by the site could easily be used to construct and monetize detailed consumer health profiles. For instance, a 40-year-old woman with an autoimmune disorder and private insurance coverage, identified by name and zip code, would be a ripe target for drug company advertising. Dr. B is a good reminder that if a service is free, you and your data are likely the product, even if the company’s mission seems altruistic. And it’s just one of many private companies that stepped in to fill gaps in the public health infrastructure—COVID testing, vaccine access, workplace safety—which are now poised to profit from reams of data submitted by pandemic-panicked consumers.


That’s all for now. Here’s hoping your inboxes are already armed with out-of-office notifications, and you’ve begun to enjoy the Memorial Day weekend—the Weekly Gist will be waiting for you when you get back. Whenever it reaches you, we hope you’ll share your feedback and suggestions with us—we love hearing from you. And don’t forget to forward this to friends and colleagues, and encourage them to subscribe, and to listen to our daily podcast.

And of course, please let us know if there’s anything we can do to be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO
chas@gisthealthcare.com

Lisa Bielamowicz, MD
Co-Founder and President
lisa@gisthealthcare.com